Cash Budget and Flexible Budget

Question 1: – Cash Budget: Estimated sales January February March April May Total Coffee sales (units) 15,000 16,000 17,500 18,000 14,500   Your friend, Chris Coffee, has been running a successful coffee shop for the last couple of years.  He has asked you to put together a cash budget.  His regular accountant was too busy to help, but told Chris his depreciation expense was going to be $1,800 per year, using the straight-line method.  He has supplied you with the following information (above) to help you put together his cash budget. The revenue for a coffee is $5 for a large, $4 for a medium and $3 for a small.  50% of his sales are Large coffees, 25% medium and 25%…


You plan to take a trip around the world in five (5) years

  Question 1: This question relates to topics 1 and 3 and LO6. a. You plan to take a trip around the world in five (5) years and predict you will need $50,000 for all anticipated costs.  You do not have any current savings but your bank has offered you 3% p.a. compounded monthly on future savings. Assuming you have five (5) full years to reach your goal, calculate the payments you will have to make each month to save the target amount of $50,000. b. Charge Car P/L is considering a project to launch charging stations for electric cars around Australia.  The initial investment is expected to be $100,000,000 and the term of the project is 6 years.  The required…


You are an investment adviser. One of your clients

You are an investment adviser. One of your clients approaches you for your advice on investing in equity shares of Alpha Company. You have collected the following data:

Earnings per share last year $3.00
Payout ratio 0.40
Return on equity 0.25 from year 1 to 5
Cost of equity capital 0.20

The company plans to increase the payout ratio to 60% after year 5. This payout ratio and the return on equity are expected to prevail till perpetuity.

Estimate the price of an equity share of this company using an appropriate dividend discount model and advise your client whether they should buy a share of the company.

You are the portfolio manager of a large company that invests

You are the portfolio manager of a large company that invests in many securities including corporate bonds. You have been assigned the task of bond portfolio management. You are provided with the following data in relation to bonds:

Maturity period 8 years
Coupon rate 10%
Par value $1,000
Coupons on bonds are paid annually
Yield to maturity of bonds 8%


Calculate the Macualay’s duration, modified duration and convexity.

Anna’s Frozen Treats Ltd sells only one product

Question 1: Inventories Anna’s Frozen Treats Ltd sells only one product, a refreshing lemonade ice-block that is very popular during the summer. The company uses the perpetual inventory system for recording its cost of sales. The inventories and purchases for the month of December 2019 are as follows:     December   Purchases Sales Quantity Cost per unit Quantity 1 Beginning inventory 100 1.00 3 Purchase 200 1.30 7 Sales 220 9 Purchase 200 1.80 14 Sales 280 18 Purchase 300 2.00 21 Sales 200 30 Purchase 100 2.20   During the month units were sold for $3.50 per unit.   Required: For the purpose of this question, please ignore GST. Show ALL your workings.    Calculate the cost of goods…

BAO2000 – Anderson is the owner of Motor Parts Pty

Reports to be printed and submitted in PDF format: AGED RECEIVABLES (SUMMARY) AGED PAYABLES (SUMMARY) TRIAL BALANCE (YTD) PROFIT & LOSS STATEMENT BALANCE SHEET BANK RECONCILIATION ACCOUNTS TRANSACTIONS ACCRUAL The assignment requires you to complete the following tasks for the month of  AUGUST using the following financial period : Financial Year 2019- 20   SET UP COMPANY as– Retail – Motor Parts Pty SET UP ACCOUNTS SET UP SALES AND PURCHASES SET UP INVENTORY ITEMS ENTER TRANSACTIONS BANK RECONCILIATION STOCKTAKE END OF PERIOD PROCESSING END OF PERIOD REPORTS Anderson is the owner of Motor Parts Pty .The firm distributes various types of vehicle parts to businesses in the Melbourne area. The company is located at 205 Ballarat Rd, Sydney, 3015,   Ph:…

Schumacher has invented a business simulation called Drivepast

Schumacher has invented a business simulation called Drivepast which can be played on a personal computer. He is considering three different proposals via which to exploit the product. Proposal 1- Sell all the rights in the game to a local computer company, Keypoint Limited. for the sum of E40,000 outright. Proposal 2 – Sell all the rights in the game to Keypoint Ltd. for five annual amounts of E14,000 payable to him on the basis of one payment at the end of the year and the other four at yearly intervals, thereafter. Proposal 3 – Set up a manufacturing company to produce and market the game. Schumacher estimates that the following data would be relevant over a period of the next…

B9MG009 – Managerial Financial Analysis

Question 1 A company makes and sells a single product. At the beginning of Year 1, there are no opening inventories. Variable production cost is $7 per unit and the sales price is $12 per unit. Fixed costs are $4,000 per annum, of which $1,800 are fixed production costs. Units produced and sold are as follows:-   Year 1             Year 2 Units               Units Sales                                        1600              2000 Production                              1800              1800   Required: Prepare an Income Statement in which you calculate the profit in each year and over the two years in total using:- Absorption costing Marginal costing Critically discuss the differences in the Profit calculations   Question 2 Blue Ltd is a technology company and is considering…

ACCT 5507 – You are considering bidding on a project to make new cases

Section 1   You are considering bidding on a project to make new cases for mobile phones. The project details include:  Upfront costs of $350,000 for a new injection-moulding machine. 4 year life $30,000 in yearly pre-tax operating costs Initial investment of $50,000 in working capital Your company has a tax rate of 30% Your company’s required rate of return is 10% At the end of 4 years you can sell the equipment for $30,000 There is no depreciation consideration for this equipment   a. Complete the following table and calculate the net present value for the project costs.   Year Cash Flows PV 0 1 2 3 4                        …

AM Airways Pty Ltd (AMAPL) operates regional air services

QUESTION   1 This question has two parts – Part A and Part B.   Part A AM Airways Pty Ltd (AMAPL) operates regional air services to corporates and the general public in South Australia.  Its financial year ends on the 30th June.  You are provided with transactions which occurred during March 20X1.  Each transaction is provided separately below together with a blank general journal template.     Required Prepare general journal entries for AM Airways Pty Ltd (AMAPL) for a selection of transactions for March 20X1 which are listed below.  If you believe a general journal entry is not required then just make that comment in the journal template.  In keeping with AMAOL’s high standards each journal entry you write must…

Clifford Limited trade receivables balance

Question 1   Clifford Limited trade receivables balance as at 31 October 2019 was €212,280. The following transactions took place during November and December 2019:     Nov 2019 € Dec 2019 € Cash sales Credit sales Sales returns from credit customers Settlement discounts allowed Cheques received from credit customers Bad debts written off Recovery of bad debt written off in 2018 Amounts due from customers to be offset against purchases in the purchase ledger Cash refunds to customers who returned items after payment  70,200 145,700 3,100 1,880 160,400 2,500 500 2,680   1,000  67,000 165,200 5,880 2,460 142,480 4,200 Nil 3,000   Nil   At 31 December 2019, there was no bad debt provision for outstanding balances recognised in the…

BF 330: FINANCIAL RISK MANAGEMENT – Platinum Real Estate Consulting Group

QUESTION ONE Platinum Real Estate Consulting Group, owner of a number of properties dotted around Lusaka is faced with a choice of: A large-scale investment (A) to improve its flats. This could produce a substantial pay-off in terms of increased revenue net of costs but will require an investment of K1, 400,000. After extensive market research it is considered that there is a 40% chance that a pay-off of K2, 500,000 will be obtained, but there is a 60% chance that it will be only K800, 000. A smaller scale project (B) to re-decorate its premises. At K500, 000 this is less costly but will produce a lower pay-off. Research data suggests a 30% chance of a gain of K1, 000,000…